Well, I’m no professional video editor by any stretch of the imagination. Rather, I’m a Final Cut Express user so I’m right in that middle range that stands to benefit the most from FCPX. For me the decision to buy was an easy one. But I am sympathetic to the impassioned outcries of the community of professional video editors that is now faced with a product that does not meet their video editing needs. The most emotional of these responses deplore Apple as being stupid and short sighted or incredibly arrogant. A second line of thought has Apple walking away from the small but highly influential high end video editing customer base in pursuit of easy profits from catering to the unwashed masses. As a long time Apple watcher who works in a different technology and science industry, I am keenly interested in how large companies manage technological innovation. Personally, I would not categorize Apple as a stupid or short sighted company; rather, they tend to be bold and calculating, but also capable of making major missteps (i.e., MobileMe, Newton, the Cube, etc.). Also they can be annoyingly tight lipped about their future plans, and perhaps there is a bit of arrogance in some of their actions. However, if we assume that there is a rational basis for the current situation, then a fundamental question is why did they release a professional software package for video editing that does not meet the current needs of the most advanced professionals, many of whom depend on FCP for their livelihood? Why, indeed. I think the answer is that they view the new FCPX as a disruptive innovation, or at least that is the hope and plan of Randy Ubillos and the Apple FCP crew. Viewed in this context this is a bold and calculated gamble. My analytical perspective is based upon the work of Dr. Clayton Christensen, the Harvard Business School professor who wrote the landmark book, “The Innovators Dilemma”. In this wonderful treatise on technology in industry, Prof. Christensen recounts the many failures of industry leading companies with outstanding managers who failed to negotiate technological changes that fundamentally altered their business environment. Specifically, when faced with new disruptive technologies, that did not fit established business models, most leading companies were incapable of surviving the sea of change flooding their industry. Interestingly, most of these new disruptive innovations had lesser capabilities initially, than the most profitable industry leading products. But over time they created new markets and customer bases, and the performance of these disruptive innovations evolved to the point where they eventually replaced the former state of the art technologies. This pattern described the decline of many diverse industry leaders including the mainframe computers manufacturers IBM and Digital, who were supplanted by the minicomputer and finally the personal computer makers; hard disk drive companies were replaced by firms making smaller and smaller hard drives; and the big three of GM, Ford and Chrysler could not fend off the smaller Japanese imports made by Toyota and Nissan. Similar stories emerge from the competition between integrated steel mills vs. minimills, traditional retailers vs. discount sellers, and cable based construction excavators vs. hydraulic excavators. Apple no doubt, is familiar with Prof. Christensen’s work and perhaps their actions can be best understood by thinking about FCPX as a disruptive technology. After all, why release a product like FCPX that does not meet the stringent demands of their most advanced customer base? If Apple is intend at abandoning this key user base, why present a preview of FCPX at the National Association of Broadcasters meeting in April 2011? If this is not a move away from the professional user base, then it can only be rational if the discontinuous jump to a new FCPX based upon completely rewritten source code will allow much greater performance levels in the near term future than could be achieved by sustaining the present FCP 7 program. Graphically, this is shown by the figure attached, adapted from Prof. Christensen’s book. Ultimately, if the new FCPX will be able to do things that are not achievable with the current FCP software platform, then the discontinuous leap to the new disruptive platform makes perfect sense. Where Apple has erred significantly, is by not communicating this intent to the community of advanced video editors and by not doing more to smooth this abrupt transition. It might have been better to create two separate teams to work on the disruptive advanced technology of FCPX while the other sustained the development of FCP7 until a more seamless transition could be implemented. However, devoting twice as many resources to video editing product development might be prohibitive, even for a company as successful as Apple. Furthermore, simultaneously developing a sustaining technology and a disruptive technology is exceedingly difficult to do under the same roof, as amply described in Prof. Christensen’s book. Apple clearly has a challenge in adopting their current strategy, because if it does not evolve into a state of the art video editing package in a relatively short period of time, then FCPX will not have been a disruptive innovation. Instead, it will just be a very nice mid level video editing product and not the state of the art leader for industry professionals. However, as an economic gamble, it is far less risky as either way; it is likely to be a commercial success in the consumer/prosumer market. However, given Apple’s history and the statements of Steve Jobs and Randy Ubillos, I can only presume that their intent is for the FCP platform to be at the forefront of the industry in the next few years. Viewed in this context, the decision to release FCPX in its present state is a bold move based upon a very calculated decision. The success of FCPX as a disruptive technology will have to be judged at in at least a year and probably 2 or 3 years from now. But that length of time might be too long, given the intensity of the negative response from the industry leaders in the video editing profession. Therein lies the conundrum of the “innovator’s dilemma.” No doubt it will be very interesting to see how this plays out.